RH: "Things Are Getting Worse"
Plus, EA will cut 6% of its staff.
Today is Thursday, March 30, 2023.
New to this newsletter? Sign up here.
RH: "Things Are Getting Worse"
Bad financial earnings and a gloomy outlook caused shares of RH (NYSE: RH) to drop by 5.38% in after-hours trading on Wednesday.
Financials: RH reported earnings of $2.88 per share in the quarter and revenue of $772 million; both were below estimates.
Details: How bad are things? RH says that inflation and higher interest rates trigged “a dramatic decline of the housing market,” including a 45% drop in luxury home sales.
Quote: “Add to that an underperforming stock market, and a banking crisis no one saw coming and the data points to business in our sector likely getting worse before it gets better.” - RH shareholder letter.
Outlook: RH says there is “accelerating weakness in the housing market,” and expects revenue for the full fiscal year to be between $2.9 billion to $3.1 billion, which was lower than what analysts expected.
Stock Price: RH is down 26% in the last 12 months, including a 15% drop in the last 30 days.
Final Thoughts: Given the state of the housing market, RH’s results are not surprising. Even RH’s luxury market can’t withstand the economic forces at play.
Notable Earnings Today: Neogen (Nasdaq: NEOG), IZEA Worldwide (Nasdaq: IZEA), Altus Power (NYSE: AMPS), Skillz (NYSE: SKLZ), Li-Cycle Holdings (NYSE: LICY), Canoo (Nasdaq: GOEV), Rumble (Nasdaq: RUM), Edap Tms (Nasdaq: EDAP), BlackBerry (NYSE: BB), AngioDynamics (Nasdaq: ANGO), Evgo (Nasdaq: EVGO), Cazoo Group (NYSE: CZOO), Aehr Test Systems (Nasdaq: AEHR), Bioventus (Nasdaq: BVS), urban-gro (Nasdaq: UGRO), China Automotive Systems (Nasdaq: CAAS), Spark Networks SE (Nasdaq: LOV), MarketWise (Nasdaq: MKTW), Curiositystream (Nasdaq: CURI).
Notable IPOs Today: iShares Breakthrough Environmental Solutions ETF (Nasdaq: ETEC), Millennium Group International Holdings Ltd (Nasdaq: MGIH), Chanson International Holding Class A Ordinary Shares (Nasdaq: CHSN), Distoken Acquisition Corporation Ordinary Shares (Nasdaq: DIST), Top KingWin Ltd Class A Ordinary Shares (Nasdaq: TCJH), Apollomics Inc. Class A Ordinary Shares (Nasdaq: APLM), SGI Dynamic Tactical ETF (Nasdaq: DYTA).
Notable Equity Crowdfunding Campaigns Ending Today: Makani Science (StartEngine), FLY Wilmington (Folla Capital), Blue Sky Kitchen (Honeycomb).
Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), GDP (8:30 a.m. ET).
EA to Lay Off 6% of Workforce
Video game giant Electronic Arts (Nasdaq: EA) announced that it would lay off 6% of its workforce, about 800 workers, causing the stock to dip by 0.12% in after-hours trading on Wednesday.
Details: EA said that it would incur about $170 million to $200 million in charges due to the layoffs.
Stock Price: EA’s stock is down 6% in the 12 months, but is up 7% in the last 30 days.
Final Thoughts: The layoffs are the result of lagging video game sales for EA and the larger video game industry. EA has also been hit with video game release delays this year.
Chainlink Surges Thanks to Partnership News
As most cryptocurrency prices stayed flat on Wednesday, Chainlink jumped by about 5%.
Details: Chainlink benefited from a new partnership with the consulting firm PwC. Larger crypto investors are also starting to pay more attention to Chainlink.
Final Thoughts: Chainlink is up 24% so far in 2023 as part of the larger crypto comeback.
Connect to clean energy in two mins (Sponsored)
Whether you rent or own your home, Arcadia can help you power it with 100% clean energy for just $5/month — no installations, long-term commitments, or changes to your current electricity provider.
When you enter your zip code and utility company, Arcadia can check if there is a community solar farm near you. Connect to it for no extra cost and receive guaranteed monthly savings on your power bill.
Sign up to become an Arcadia member today, and get a welcome gift of $10 toward your power bill.
Trends to Watch
Pop Art Meets Investing: Andy Warhol Artworks to Be Offered as Tokenized Investments on Ethereum (CoinDesk)
A Harsher Reality: The Metaverse Is Quickly Turning Into the Meh-taverse (The Wall Street Journal)
Not Cinematic: Disney Lays Off Ike Perlmutter, Chairman of Marvel Entertainment (The New York Times)
Parting Clouds: Sprinklr Shares Rise 12% as 4Q Loss Narrows Significantly (MarketWatch)
Start Spreading the News: JetBlue is preparing to trim New York flights in response to FAA staffing shortage, CEO says (CNBC)
Thank you for reading!
Forward to a friend and tell them to sign up here.
Be social: Like our Facebook page and follow us on Twitter.
Want more investing tips? Listen to the podcast.
Show Your Support: Buy Me a Coffee.
Questions or comments? Hit reply to reach out.